Kansas Retailers' Sales Tax
Sales of Meals by Hospitals
TO: Public and Private Nonprofit Hospitals
FROM: Kansas Department of Revenue
RE: Sales of Meals by Public or Private Nonprofit Hospitals
DATE: January 13, 1993
K.S.A. 79-3603(d) imposes a sales tax: "upon the gross receipts from the sale of meals or drinks furnished at any private club, drinking establishment, catered event, restaurant, eating house, dining car, hotel, drugstore or other place where meals or drinks are regularly sold to the public."
K.A.R. 92-19-21(d) states "When a public or private nonprofit hospital operates a lunch room, cafeteria, or dining room for the exclusive purpose of providing meals for its respective employees and staff the hospital shall not be considered to be engaged in conducting a place where meals or drinks are regularly sold to the public and shall not collect and remit tax on these sales."
Based on these authorities, sales tax is not due on the sale of meals to hospital employees and staff if, the lunch room, cafeteria, or dining room is open
to the employees and staff of that hospital.
K.A.R. 92-19-21(d) also states "When a public or private nonprofit hospital makes its cafeteria, lunch room, or dining room available for use by the general public, the hospital shall be considered to be in the business of conducting a place where meals or drinks are regularly sold to the public and shall collect and remit the sales tax."
If the cafeteria, lunch room, or dining room is available for use by the general public the cafeteria, lunch room, or dining room operator is required to collect sales tax on the gross receipts from the sale of
meals, including the sale of meals tot he hospital employees and staff.
K.S.A.. 79-3606(b) exempts from sales tax all sales of tangible personal property or service, including the renting and leasing of tangible personal property purchased directly by a public or private nonprofit hospital and used exclusively for such hospital, except when such hospital is engaged or proposes to engage in any business specifically taxable under the provisions of this act and such items of tangible personal property or service are used or proposed to be used in such business." Therefore, any hospital that operates a cafeteria, lunch room, or dining room that is available for use by the general public and shall
be exempt from sales tax on purchases of tangible personal property or services used in that cafeteria, lunch room or dining room. (This includes, but is not limited to, items such as cash registers, chairs, tables, plates, eating utensils, repair parts and services, construction services, etc.).
This Revenue Notice supersedes all previous Department of Revenue rulings and opinions, and shall become effective upon its publication in the Kansas Register.
Should you have further questions in this area, you may contact the Kansas Department of Revenue, Technical Support Unit, Topeka, Kansas 66625 or call (913) 296-5476.
Published January 21, 1993.
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